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Junaid Siddiqui: Department of Management, School of Business Administration and Economics, California State University, California, USA
Brian H. Kleiner: Department of Management, School of Business Administration and Economics, California State University, California, USA
Introduction
Like most other service industries, the health care industry is very labor intensive. An important reason for reliance on an extensive work force is that it is not possible to produce a "service" and store it for future consumption. The manufacture of the commodity that is purchased and the consumption of that commodity takes place at the same time. Hence, the interaction between consumers and health care professionals is an integral part of the provision of health services. The intensive use of labor for service delivery, and possibility of variability in professional practice, require that the attention of leaders in the industry be directed toward managing the performance of the persons involved in the delivery of health services. The effective management of people requires that health services executives understand the factors that influence the performance of individuals employed in their organizations. These factors include not only the traditional human resource management activities, but also environmental and other organizational factors that come in contact with human resource activities.
The paradox faced by the health care industry
Health care industry has been going through some radical changes in recent years. There has been a growing interest in increasing the participation of employees in decision-making processes, and improving their level of psychological development and commitment within the organization. Concepts such as quality circles and TQM (total quality management) are being implemented, and possibilities of the value of corporate culture in helping health services organization in its efforts for high performance are being explored.
On the other hand, financial and economic pressures on the organization have caused these same institutions to become concerned about maintaining market share, improving their competitiveness, achieving internal efficiencies, and maximizing reimbursements. The drive for financial performance often forces health institutions to take such actions like reducing their work force through termination, curtailing spending on employee development, postponing compensation increases, and to make other short termdecisions that are not conducive to a quality work life for their employees (Fottler et al., 1994). In this report, we shall be discussing these...